Location: Kenai Peninsula Borough, AK | Metro: Kenai Peninsula Borough, AK
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,020 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,340 |
| 3 Bedrooms | $1,860 |
| 4 Bedrooms | $2,240 |
| 5 Bedrooms | $2,598 |
| 6 Bedrooms | $2,910 |
| 7 Bedrooms | $3,143 |
| 8 Bedrooms | $3,300 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,860 | $322,287 | 0.58% | F |
U.S. Census Bureau data (2024)
In ZIP code 99556, the Section 8 economics present a unique scenario for landlords and small-portfolio investors. The SAFMR (Section 8 Area Fair Market Rent) for a two-bedroom apartment is set at $1,280 per month for fiscal year 2026. This figure represents the maximum amount that the housing authority will pay on behalf of a tenant under the Section 8 program. However, it's important to note that the local market rent for a similar unit is considerably lower at $1,078 per month, based on recent Census ACS data.
The SAFMR of $1,280 is not the full amount landlords receive. The actual reimbursement depends on the tenant's contribution and any utility allowances. Tenants are generally required to pay 30% of their adjusted income towards rent. For example, if a tenant has an adjusted income of $1,000, they would contribute $300 towards the rent. The housing authority then covers the remaining portion up to the SAFMR limit. In addition to the base rent, there can be utility allowances which vary but typically range from $150 to $250 depending on the specific circumstances and needs of the tenant.
To illustrate, let's assume a tenant contributes $300 towards rent and receives a utility allowance of $200. The total amount covered by the housing authority would be $1,280 minus the tenant's contribution, which equals $980. Adding the utility allowance brings the total reimbursement to $1,180. Therefore, the landlord would receive $1,180 from the housing authority plus $300 from the tenant, totaling $1,480. However, since the market rent is only $1,078, this creates a surplus for the landlord.
The typical reimbursement gap or surplus in ZIP 99556 for a two-bedroom apartment is calculated by subtracting the market rent from the total reimbursement received. In this case, the surplus would be $1,480 - $1,078 = $402. This means landlords can potentially earn a significant surplus above the local market rate when renting to tenants with Section 8 vouchers.
It's crucial for landlords to understand these economic dynamics to make informed decisions about participating in the Section 8 program. The SAFMR ensures that landlords in this specific ZIP code receive a higher reimbursement compared to the local market conditions, providing a financial advantage while still making housing affordable for low-income families.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.